No-one is keen to talk the market down, though some West African exporters say that trading overall is just a little steadier in volume and price than it was a couple of months ago.

Having had quite a good run from May to mid-October it now appears that Asian importers are well stocked and are not seriously looking for new purchases for the time being. Gabon exporters report that log buying for India is at a three-year low and that China is well stocked with okoumé and other peeler logs. Since both the Indian and Chinese economies are in good shape, and China in particular has an incredibly high growth rate in the use of wood products for housing, furniture and construction of all kinds, plus fast-growing exports of plywood and other major wood products, any slowdown in imports can be only temporary. Though meranti log prices have eased by US$2 or US$3/m3 there is no excess volume on offer and so far this very slight downtrend has not affected West African price levels for logs or lumber.

West African log prices have shown only minor adjustments over the past three months, most remaining very firm and unchanged. After a price fall earlier in the year even sapele managed to hold on to a small price gain though at one stage there was excess volume at ports looking for buyers.

Through October the most significant change was in the price of azobe, a favourite species in the Netherlands, down by €30/m3 and still weakening. Many Dutch azobe processors and importers have moved production to Gabon and Cameroon, exporting the semi-finished or finished products back to their home companies, but now face strong competition from Brazilian angelim vermeilho and West African okan – an alternative to greenheart – both of which are on offer at much lower prices. Also, it is well known that the Netherlands economy has not shown the hoped for recovery and this has had serious negative effects on their market volumes and prices. In contrast, prices for ayous/obeche have moved up by €30/m3, triggered largely by low production causing tight supply.

Bunker surcharges

Log freight rates have stabilised, liner terms for logs to Europe are down €2 at €80/m3 but now bunker surcharges are being imposed in response to the recent high oil price. In other shipping news Gabon exporters report a slowdown in ship availability for China; presumably buyers are spreading out shipments to minimise stock build.

Overall, West African export lumber prices have continued very stable. The only substantial change through October was azobe where squares 4×4 and 6×6 are down €37, hydraulic planks down €51 and sleepers down €35/m3. By August, sapele scantlings had dropped €31/m3 but have now regained €30. Sapele GMS for Spain has not regained any of the fall of €62/m3 and trade has been reported as quite slow with buyers for Spain very tough on price.

In spite of a tight supply situation iroko seems not to have shown any price gains over the past three months, at least so far as exporters are concerned. Okoumé lumber exporters report difficulties in finalising new contracts because the current high freight charges have added too high a premium on to what were very competitive introductory prices. Italian buyers are still buying but one or two producers in Gabon say they are considering curtailing production levels as there is no chance of profit as they cannot absorb the increased freight costs.

Export ban

The news that Indonesia has announced a ban on the export of rough sawn lumber, including sleepers, would be welcome indeed for West African sawmills, especially those in the highly competitive sleeper business. No details have been released on the date of implementation and it is expected any ban would not apply to KD and further processed timber.

The October ITTO bulletin reports that the Inter-African Forest Industry Association is involved with establishing a Pan African Forest Certification scheme which is planning to embody the principles and criteria of ATO and ITTO for forest management and certification for Africa. No doubt in due course there will be reaction from FSC and other certifying organisations anxious not to see a proliferation of diverse certification schemes. Unfortunately, African timber organisations have not been well publicised or reported and are usually government run rather than being actual trade associations.

West African traders have noted the modest downturn in plywood prices in the Far East and while African mills are not extensively involved in plywood exports, there is the possible knock-on effect on peeler log prices to take into consideration. As mentioned in previous reports, availability of the prime species such as iroko, sipo, sapele and even azobe is becoming tighter and the remaining resources more remote and more expensive to access. As a consequence most traders remain optimistic over the long term, in spite of short-term fluctuations in prices and volumes.

Right now, exporters say they expect the final two months of the year to be more difficult but are encouraged that prices have held up for Asian market leaders like meranti and serayah. So far, West African prices too have continued very stable and producers are very firm on the need to recoup their costs and be able to pay the ever-increasing tax burdens as governments strive to maximise income from forest resources.